How the Peak Oil story could be “close,” but not quite right

A few years ago, especially in the 2005-2008 period, many people were concerned that the oil supply would run out. They were concerned about high oil prices and a possible need for rationing. The story was often called “Peak Oil.” Peak Oil theorists have also branched out into providing calculations that might be used to determine which substitutes for fossil fuels seem to have the most promise. What is right about the Peak Oil story, and what is misleading or wrong? Let’s look at a few of the pieces.

[1] What Is the Role of Energy in the Economy?

The real story is that the operation of the economy depends on the supply of  affordable energy. Without this energy supply, we could not make goods and services of any kind. The world’s GDP would be zero. Everything we have, from the food on our dinner table, to the pixels on our computer, to the roads we drive on is only possible because the economy “dissipates” energy. Even our jobs depend on energy dissipation. Some of this energy is human energy. The vast majority of it is the energy of fossil fuels and of other supplements to human energy.

Peak Oilers generally have gotten this story right, but they often miss the “affordable” part of the story. Economists have been in denial of this story. A big part of the problem is that it would be problematic to admit that the economy is tied to fossil fuels and to other energy sources whose supply seems to be limited. It would be impossible to talk about growth forever, if economic growth were directly tied to the consumption of limited energy resources.

[2] What Happens When Oil and Other Energy Supplies Become Increasingly Difficult to Extract?

Fossil fuel producers tend to extract the fuels that are easiest to extract first. Over time, even with technology changes, this tends to lead to higher extraction costs for the remaining fuels. Peak Oilers have been quick to notice this relationship.

The question that then arises is, “Can these higher extraction costs be passed on to the consumer as higher prices?” Peak Oil theorists, as well as many others, have tended to say, “Of course, the higher cost of oil extraction will lead to higher oil prices. Energy is essential to the economy.” In fact, we did see very high oil prices in the 1974-1981 period, in the 2004-2008 period, and in the 2011-2013 period.

Unfortunately, it is not true that higher extraction costs always can be passed on to consumers as higher prices. Many energy costs are very well “buried” in finished goods, such as food, cars, air conditioners, and trucks. After a point, energy prices “top out” at what is affordable for citizens, considering current wage levels and interest rate levels. This level of the affordable energy price will vary over time, with lower interest rates and higher debt amounts generally allowing higher energy prices. Greater wage disparity will tend to reduce the affordable price level, because fewer workers can afford these finished goods.

The underlying problem is that, from the consumer’s perspective, high oil prices look like inefficiency on the part of the oil company. Normally, being inefficient leads to costs that can’t be passed along to the consumer. We should not be surprised if, at some point, it is no longer possible to pass these higher costs on as higher prices.

If higher extraction costs cannot be passed on to consumers, this is a terrible situation for energy producers. After not too many years, this situation tends to lead to peak energy output because producers and their governments tend to go bankrupt. This seems to be the situation we are reaching for oil, coal and natural gas. This is a much worse situation than the high price situation because the high price situation tends to lead to more supply; low prices tend to collapse the production system.

The underlying problem is that low prices, even if they are satisfactory to the consumer, tend to be too low for the companies producing energy products. Peak Oilers miss the fact that a two-way tug of war is taking place. Low prices look like a great outcome from the perspective of consumers, but they are a disaster from the perspective of producers.

[3] How Important Is Hubbert’s Curve for Determining the Shape of Future Oil (or Coal or Natural Gas) Extraction?

Figure 1. M. King Hubbert symmetric curve from Nuclear Energy and the Fossil Fuels. Total quantity of resources that will ultimately be extracted is Q.

Most Peak Oilers seem to believe that if we see Hubbert shaped curves in individual fields, we should expect to see a similar shaped curve for total oil supply or for the supply of other fossil fuels. They think that production patterns to date plus outstanding reserves can give realistic views of the future extraction patterns. Frequently, Peak Oilers will assume that once production of oil, coal or natural gas starts to fall, we will still have about 50% of the beginning amount left. Thus, we can plan on a fairly long, slow decline in fossil fuel production.

However, many Peak Oilers will agree that if the energy used to extract energy is subtracted, the result will be more of a Seneca Cliff (Figure 2). Seneca is known for saying, “Increases are of sluggish growth, but the way to ruin is rapid.”

Figure 2. Seneca Cliff by Ugo Bardi.

Peak Oilers also tend to limit the amount of resources that they consider extractible, to exclude those that are particularly high in cost.

Even with these adjustments, it seems to me that the situation is likely to be even worse than most Peak Oil analyses suggest because of the interconnected nature of the economy and the fact that world population continues to grow. The economy cannot get along with a sharp reduction in energy consumption per capita. Some governments may collapse; many debtors may default; some banks may be forced to close. The situation may resemble the “societal collapse” situation experienced by many early economies.

One concern I have is that the Hubbert model, once it became the standard model for what energy supply might be available in the future, could easily be distorted. With enough assumptions about ever-rising energy prices and ever-improving technology, it became possible to claim that any fossil fuel resource in the ground could be extracted at some point in the future. Such outrageous assumptions can be used to claim that our biggest future problem will be climate change. After hearing enough climate change forecasts, people tend to forget about our immediate energy problems, since current problems are mostly hidden from consumers by low energy prices.

[4] Is Running Out of Oil Our Biggest Energy Problem?

The story told by Peak Oilers is based on the assumption that oil is our big problem and that we have plenty of other fuels. Oil is indeed our highest cost fuel and is very energy dense. Nevertheless, I think this is an incorrect assessment of our situation; the real issue is keeping the average cost of energy consumption low enough so that goods and services made from energy products will be affordable by consumers. Even factory workers need to be able to buy goods made by the economy.

Figure 2. Historical oil, natural gas, and oil production, based on Statistical Review of World Energy, 2017.

The way the cost of energy consumption can be kept low is mostly a “mix” issue. If the mix of energy products is heavily weighted toward low cost energy-related products, such as coal and labor from low wage countries, then the overall cost of energy can be kept low. This is a major reason why the economies of China and India have been able to grow rapidly in recent years.

If underlying costs of production are rising, mix changes cannot be expected to keep the problem hidden indefinitely. A recession is a likely outcome if the average price of energy, even with the mix changes, isn’t kept low enough for consumers. Energy producers, on the other hand, depend on energy prices that are high enough that they can make adequate reinvestment. If they cannot make adequate reinvestment, the whole system will tend to collapse.

A collapse based on prices that are too low for producers will not occur immediately, however. The problem can be hidden for a while by a variety of techniques, including additional debt for producers and lower interest rates for consumers. We seem to be in the period during which the problems of producers can be temporarily hidden. Once this grace period has passed, the economy is in danger of collapsing, with oil not necessarily singled out first.

Following collapse, large amounts oil, coal and natural gas are likely to be left in the ground. Some of it may even cease to be available before the 50% point of the Hubbert curve is reached. Electricity may very well collapse at the same time as fossil fuels.

[5] How Should We Measure Whether an Energy-Producing Device Is Actually Providing a Worthwhile Service to the Economy?

The answer that some energy researchers have come up with is, “We need to compare energy output with energy input” in a calculation called Energy Return on Energy Invested (EROI). This approach looks like a simple ratio of (Energy Output)/(Energy Input), but “the devil is in the details.”

As I looked through the workings of the Limits to Growth model, it occurred to me that the EROI calculation needs to line up with how the economy really operates. If this is the case, we really need a very rapid return of the energy output, relative to the energy input. Also, in the aggregate, the energy output needs to scale up very rapidly. Furthermore, the energy output needs to match the types of energy needed for the devices the economy is currently using. If the output is different (such as electricity instead of fossil fuels), the EROI calculation needs to be adjusted to reflect the expected energy cost and time delay associated with a changeover in devices to match the new type of energy output.

In a footnote, I have attached a list of what I see as requirements that seem to be needed for EROI calculations, based on the LTG model, as well as other considerations.1

Of course, in a setting of many researchers working on a subject and many peer reviewed papers, a concept such as EROI is gradually modified and enhanced by different researchers. For example, EROI is turned around to become the Energy Payback Period. This is used to show prospective buyers of a device how helpful a particular device supposedly is. Researchers who are trying to “push” a type of energy product will find ways to perform the EROI calculation that are as helpful as possible to their cause.

The problem, though, is that if more stringent EROI requirements are put into effect, wind and solar can be expected to do much less well in EROI calculations. They very likely drop below the threshold of being useful to the economy as energy producers. This is especially the case if they are added to the economy in great numbers to try to significantly replace fossil fuels.

Regardless of their value as energy producers, there might still be a reason for building wind and solar. Building them probably does help the economy in the same sense that building unneeded roads and apartment buildings does. In theory, all of these things might someday be somewhat useful. They are helpful now in that they add jobs. Also, the building of wind and solar devices adds “demand,” which helps keep the price of coal in China high enough to encourage additional extraction. But in terms of truly keeping the world economy operating over the long haul, or in terms of scaling up to the quantity of energy supply that is really needed to operate the economy, wind and solar do very little.

[6] How Should Net Energy Be Defined?

Net Energy is defined by EROI researchers as (Energy Output) minus (Energy Input). Unfortunately, as far as I can see, this calculation provides virtually no valid information. Instead, it promotes the belief that the benefit of a device can be defined in terms of (Energy Output) minus (Energy Input). In practice, it is very difficult to measure more than a small fraction of the Energy Inputs needed to produce an Energy Output, while Energy Output does tend to be easily measurable. This imbalance leads to a situation where the calculation of (Energy Output) minus (Energy Input) provides a gross overestimate of how helpful an energy device really is.

If we are dealing with a fish or some other animal, the amount of energy that the animal can expend on gathering food is not very high because it needs to use the vast majority of its energy for other purposes, such as respiration, reproduction, and digestion. In general, a fish can only use about 10% of its energy from food for gathering food. Limits to Growth modeling seems to suggest a similar maximum energy-gathering usage percentage of 10%. In this case, this percentage would apply to the resources needed for capturing, processing, and distributing energy to the world economy.

Perhaps there is a need for a substitute for Net Energy, calculated compared to the budgeted maximum expenditure for the function of “Energy gathering, processing and distribution.” For example, the term Surplus Energy might be used instead, calculated as (10% x Energy Output) minus (Energy Input), where Energy Inputs are subject to suitably wide boundaries. If an energy product has a very favorable evaluation on this basis, it will be inexpensive to produce, making it affordable to buyers. At the same time, the cost of production will be low, leaving plenty of funds with which to pay taxes.

Alternately, Surplus Energy might be calculated in terms of the tax revenue that governments are able to collect, relative to the new energy type. Tax revenue based on fossil fuel production and/or consumption is very signification today. Oil exporting nations often rely primarily on oil-based tax revenue to support their programs. Many countries tax gasoline consumption highly. Another type of fossil fuel tax is a carbon tax. Any replacement for fossil fuels will need to replace the loss of tax revenue associated with fossil fuels, because taxation is the way Surplus Energy is captured for the good of the economy as a whole.

When we consider the tax aspect, we find that any replacement for fossil fuels has three conflicting demands on its pricing:

(a) Prices to the consumer must be low enough to prevent recession.

(b) Prices must be high enough that the producer of the replacement energy supply can earn adequate after-tax revenue to support its operations.

(c) The mark-up between the cost of production and the sales price must be high enough that governments can take a very significant share of gross receipts as tax revenue.

The only way that it is possible to meet these three demands simultaneously is if the unsubsidized cost of energy production is extremely low. Wind and solar clearly come nowhere near being able to meet this very low price threshold; they still rely on subsidies. One of the biggest subsidies is being allowed to “go first” when their energy supply is available. The greater the share of intermittent wind and solar that is added to the electric grid, the more disruptive this subsidy becomes.

Afterword: Is this a criticism of Peak Oil energy researchers?

No. I know many of these researchers quite well. They are hard working individuals who have tried to figure out what is happening in the energy arena with very little funding. Some of them are aware of the collapse issue, but it is not something that they can discuss in the journals they usually write in. The 1972 The Limits to Growth modeling that I mentioned in my last post was ridiculed by a large number of people. It was not possible to believe that the world economy could collapse, certainly not in the near term.

Early researchers were not aware that the physics of energy extraction extends to the economy as a whole, rather than ending at the wellhead. Because of this, they tended to overlook the importance of affordability. Affordability is important because there is a pricing conflict between the low prices needed by buyers of energy products and the high prices needed by producers. This conflict becomes especially apparent as the world approaches energy limits; this conflict was not easily seen in the data reviewed by Hubbert. Once Hubbert missed the affordability issue, his followers tended to go follow the same path.

Researchers needed to start from somewhere. The start that Peak Oil researchers made was as reasonable as any. They were convinced that there was an energy problem, and they wanted to convince others of the problem. But this was difficult to do. When they would develop an approach that they thought would make the energy problem clear to everyone, other researchers would modify it. They would take whatever aspect of the research seemed to be helpful to them and would tweak it to support whatever view they wanted to encourage–often with precisely the opposite intent to what the original researchers had expected.

Thus, the approaches that Peak Oil researchers thought would show that there was a likely energy shortage ahead ended up being used to “prove” that we have an almost unlimited amount of fossil fuel energy available. It seems as though the world has such a strong need for happily-ever-after endings that self-organization pushes research in the direction of showing outcomes people want to see, even if they are untrue.

Footnote:

[1] The following is from an e-mail I sent to some energy researchers concerned about EROI calculations:

A concern I have is that EROI really needs to match up with the concept of Fraction of Capital to Obtaining Non-Renewable Resources (FCONRR) in the Limits to Growth model. If a person looks at how the 2003 World3 model functions, the person can figure out several things:

1. FCONRR is what I would call a calendar year “in and out” function. Forecasting EROI using a model year approach gives artificially favorable indications. FCONRR calculations line up fairly well with many fossil fuel EROI calculations, but not with the usual model approach used for capital devices used to generate electricity.

2. I would describe FCONRR as corresponding to “Point of Use (POU) EROI,” not Wellhead EROI.

3. If a newly built device causes a previously built capital device to be closed down before the end of its useful lifetime (for example, solar output leads to distorted electricity prices, which in turn leads to unprofitable nuclear), this has an adverse impact on FCONRR. Thus, intermittent renewables need to be evaluated on a very broad basis.

4. In the model, FCONRR starts at 5% and gradually increases to 10%. This is equivalent to overall average calendar year POU EROI starting at 20:1 and falling to 10:1. The model shows the world economy growing nicely, when total FCONRR is 5%. It gradually slows, as FCONRR increases to 10%. Once overall FCONRR exceeds 10%, the model shows the world economy contracting.

5. I was struck by the fact that FCONRR equaling 10% corresponds to the ratio that Charlie Hall describes as the share of energy that a fish can afford to use to gather its food. Once a fish starts using more than 10% of its energy for gathering food, it is all downhill from there. The fish cannot live very long, without enough energy to support the rest of it functions. Similarly, an economy cannot last very long, without enough energy to support its other functions.

6. In the model, necessary resources out depend on the population. The higher the population, the more resources out are needed. It is falling resources per capita that causes the system to collapse. This is why FCONRR needs to stay strictly below 10% and energy consumption must be ramped up rapidly. This would suggest that average POU EROI needs to stay strictly above 10:1, to keep the system away from collapse.

7. If there are not enough resources out in total, for a given calendar year, this becomes a huge problem. The way this works out in practice is that if a device uses a lot of upfront capital, these devices can sort of work out OK, if (a) only a few are built each year, (b) they have very high EROI, and (c) they last a long time. Thus, hydro and dams can work. But devices with an EROI close to 10:1 cannot work, especially if they need to be scaled up quickly and need a lot of supporting infrastructure.

8. Clearly, using the FCONRR approach, eliminating a high EROI fuel is as detrimental to the system as adding a low EROI device with a lot of upfront capital spending required. It is the overall output compared to population that is important. The quantity of output is even more important than the EROI ratio.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,555 Responses to How the Peak Oil story could be “close,” but not quite right

      • Uncle Bill says:

        Duncan, brings back the days of long ago. EARTH FIRST! No compromise in defense of Mother Earth. Seems like another lifetime ago…Judi Bari…RIP…a true PATRIOT…
        Read her book “Timber Wars”

        Judi Bari (November 7, 1949 – March 2, 1997) was an American environmentalist and labor leader, a feminist, and the principal organizer of Earth First! campaigns against logging in the ancient redwood forests of Northern California in the 1980s and 1990s. She also organized efforts through Earth First! – Industrial Workers of the World Local 1 to bring timber workers and environmentalists together in common cause.
        .

        Car bombing attempt on Bari’s life
        On May 24, 1990, in Oakland, California, the vehicle used by Bari and Darryl Cherney was blown up by a pipe bomb.[22] Bari was severely injured by the blast, as the bomb was located under her seat; Cherney suffered minor injuries. Bari was arrested for transporting explosives while she was still in critical condition with a fractured pelvis and other major injuries.
        In 2002, a jury in Bari’s and Cherney’s federal civil lawsuit found that their civil rights had been violated.

        As part of the jury’s verdict, the judge ordered Frank Doyle and two other FBI agents and three Oakland police officers to pay a total of $4.4 million to Cherney and to Bari’s estate.[55] The award was a response to the defendants’ violation of the plaintiffs’ First Amendment rights to freedom of speech and freedom of assembly, and for the defendants’ various unlawful acts, including unlawful search and seizure in violation of the plaintiff’s Fourth Amendment rights. At trial the FBI and the Oakland Police pointed fingers at each other.[49
        https://en.m.wikipedia.org/wiki/Judi_Bari

        Yes Sir, BAU FULL THROTTLE BABY…right smack in a brick wall.

        • Duncan Idaho says:

          Judi Bari was a true warrior for the planet.
          Tragic loss.

          • Duncan Idaho says:

            I actually had a detailed conservation with Cherney on the bombing.
            The State and its motives were brutal.

            • Uncle Bill says:

              As has been posted here in the comments…BAU..whatever it takes…and I mean whatever it takes….soon the State will be turning on its law abiding citizens

            • TIm Groves says:

              Would that be the Deep State?

              Some people think it might have been her ex-husband wot dun the bombing.

              Others have speculated that Cherney may have been responsible for the bomb but that it went off ahead of time.

              And then there were enemies both in the Earth First movement, in the logging industry, and among her own neighbors who hated her with a passion.

              Lots of suspects.

              Not that the FBI or the CIA is above such things as assassinating people with bombs, but there has never been any proof they bombed this pair, has there?

            • Uncle Bill says:

              Boy, Tim, how do you ever fabricate your story, I wonder? Some folks have a very active imagination, ignoring the actual evidence.
              Does not negate the outcome of the finding of the lawsuit against the FBI and the Police, does it, Sir?
              Please read the link to her Wikipedia page…that will correct your other unwarranted comments, than you.

            • TIm Groves says:

              Bill, I wasn’t there and haven’t exhaustively examined all the evidence, and I haven’t heard the arguments the prosecution and the defense councils. And even if I had done all that, I would still probably be undecided. That’s why I stick to questions rather than pretending to give definitive answers.

              If you think the State in some form or another bombed these two activists, that’s your prerogative, your opinion, your theory, your story, or your truth. But it isn’t an established fact. You don’t know what happened any more than I do.

              The lawsuit you mention was unrelated to the charge of who planted the bomb. Before she died, Bari and Cherney filed suit against the FBI and OPD for violating their civil rights by pursuing an unsupported criminal case against them. In 2002, a jury found for Bari and Cherney, and ordered Frank Doyle, two other FBI agents, and three Oakland police officers to pay Bari’s estate and Cherney $4.4 million, after a trial mainly characterized by the OPD and FBI blaming each other for the investigation’s myriad screwups.

              So we are still left with a real-life whodunnit, innit?

            • Uncle Bill says:

              Tim, it is apparent that you don’t know…but you set to imply that you do know.
              You ignore the pertinent.
              I requested you read my link….if you had you would read
              The rapid presence of FBI bomb investigators at the scene, virtually simultaneously with first responders from the Oakland Police Department, raised suspicion that the FBI knew about the bomb beforehand and might even have been responsible for the bomb.
              In Bari’s words, it was as if the investigators were “waiting around the corner with their fingers in their ears.” It was later revealed that there had been a tip to law enforcement, suspected to be from the person responsible for the bomb, that “some heavies” were carrying a bomb south for sabotage in the Santa Cruz area.[3][23] The rapid response of the FBI to the bombing and their immediate focus on Bari as a suspect rather than a victim are consistent with surveillance of Bari after receiving a tip about a bomb.
              FBI analysis of the explosive device determined it was a pipe bomb with nails wrapped to its surface to create shrapnel, and that it was equipped with a timer-armed motion trigger ensuring it would explode only when the car was driven. The bomb was also placed on the floorboard directly under the driver’s seat, not on the floorboard behind the seat as Agent Doyle had claimed. That evidence pointed to the bomb being an anti-personnel device placed with the intent of killing the driver of Bari’s car. Despite that evidence, the FBI investigation remained focused on the theory that the explosion was an accidental detonation of a device knowingly transported by Bari, with attempts to match roofing nails transported in Bari’s car to finishing nails used with the bomb. After seven weeks of continual news stories citing repeated police claims that all evidence pointed to Bari and Cherney as culprits, the Alameda County District Attorney announced that he would not file any formal charges against the pair due to insufficient evidence against them. Law enforcement agencies never followed through on the evidence that the bombing was an attempt on Bari’s life and the crime would go unsolved.[33]
              Come now, FBI never followed through…. surprise, surprise…wonder way
              https://en.m.wikipedia.org/wiki/Judi_Bari
              Do I need to continue?

          • TIm Groves says:

            She was a true warrior for the planet?

            You are fond of rhetorical exaggeration, Duncan.
            But what do you mean by that ostensibly vapid statement?

            • Uncle Bill says:

              Perhaps we should allow Ms. Bari to give you the answer herself.

            • TIm Groves says:

              Well, here Judy begins by saying she believes that all species are equal and that no species has the right to cause the extinction of another.

              That’s hardly defending the earth, is it? The earth is indifferent to how many species inhabit it and whether they kill each other off or not, surely?

              It’s also reciting a creed of credulous speciesism. Believing in equality between species, believing in the rights of species—it’s all very well, but it’s just airy-fairy intellectualism. Judi’s statement is indicative of a human mind attempting to impose its own opinion on the natural in order to achieve its own goals.

              It’s also at the other extreme of the Old Testament-inspired view of humans as masters of creation, with the right to do as they will to any other species anytime and anywhere they choose.

              And it is inherently anti-individualistic in that it implies that as long as a species is not endangered, it is perfectly OK to cause the extinction of its individual members.

              Which brings me back to the fascinating question of how do we as warriors or in any other capacity defend the earth?

            • Uncle Bill says:

              Well, Tim, before you start to judge her please listen to her full interview yourself.
              Appears you have an agenda yourself and wish to assert it. Please go back and view and listen to her whole interview, thank you, Sir.
              If you do so, that will validate Duncan’s comment.
              P.S. I’m not going to debate you.

    • Davidin100millionbilliontrillionzillionyears says:

      “Abolish Billionaires”…

      I think the left/Ds have found what they have been looking for in the upcoming 2020 POTUS election…

      emotional subjects/stories that will fire up voters in their direction…

      there doesn’t even have to be truth or logic either, though in this case I tend to agree with the author that policies should change to minimize the amount of billionaires…

      other 2020 subjects:

      free health care for all…

      free college for all students…

      these are subjects where it is highly doubtful that any candidate could fulfill such promises…

      but does it even matter?

      the Ds want to win in 2020…

      more voters are becoming increasingly disenchanted with the way things are…

      they will vote for what is new…

      which is why Trump won in 2016 and AOC won her election in 2018…

      and her Green New Deal is highly unlikely to be even partially enacted…

      it’s illogical and impractical, but most left leaning voters don’t know that…

      (check out #greennewdisaster on Twitter for rightist commentary… quite entertaining)…

      and as mentioned on Twitter:

      almost all of the Ds who have declared that they are running in 2020 are publicly supporting the Green New Deal…

      it’s the winning strategy, even though the GND is going nowhere…

      • xabier says:

        Well, as Donald Tusk said to Cameron: ‘You don’t have to enact every manifesto promise’.

        The prosperity narrative is certainly failing nearly everywhere, and people will grasp at straws.

      • Uncle Bill says:

        Who needs Socialism, when there is rigged Capitalism….like Trump declared….”This Nation will never be socialist country”. He is one of those that reaped the rewards of this fact, why change it?

        P.S. Odd that those with distain for socialist policies readily accept Government Programs, such as, Social Security and Medicare, ect. They could easily determine how much they contributed to the program and terminate it when they recover their monies plus interest.
        Never heard that being done. Heard from a retired mail carrier that delivered SS checks to an exclusive wealthy area, the woman would chuckle that this was there play money for that day….Suppose if one is fortunate and secure in life…it’s a beach.

        • Duncan Idaho says:

          ‘a loud, nasty, thin-skinned fraud’
          From a current candidate.
          I bet you can guess who it is about.

        • Chrome Mags says:

          Isn’t socialism when people pay taxes and those taxes are used for various purposes, like fire dept., police dept., library, post office and the military. Anyone in the military is a socialist worker. Ok, Trump and GOP, get rid of the military and reduce the amount of socialism.

          When right wing politicians say they don’t like socialism, they are actually saying they don’t like communism. How the two became interchangeable is a question for the GOP that continues to conflate the two, without I might add the listless Dems ever contradicting those statements.

          Communism is the idea that everyone (except the top elite of course) get a standard wage. I don’t see the Dems advocating a standard wage.

          • Uncle Bill says:

            Like the old saying …Why live in Russia (Soviet Union) when you can live Netherlands or Belgium? They may pay a higher tax rate, but get a lot in return.
            Food for thought….President FDR received, during the depression, letters of heartbreak from the elderly in destitute conditions, pleading for a way to support themselves.
            Many, too old to work or not hirable (high unemployment) needed a safety net. That’s where Social Security came into being. Of course, FDR, being handicapped in a wheelchair, could put himself their shoes (just a joke).
            Actually, he went a step further, setting up an universal health care one payer system for the United States. World War II interrupted it’s placement and after the war the administrative personal to set up the system in the United States were first sent to war torn Europe to establish it there first. Harry Truman had his hands full with other pressing matters and decided the Labor Unions should handle the matter with business.
            Oh well, such is fate.

          • TIm Groves says:

            Well, the idea that “socialism is communism” goes back a long way. Back in the day, Lenin said so. GB Shaw said so. Sylvia Pankhurst said so. Ayn Rand said so. You can classify collectivist ideologies until you have 39 flavors, but they are all flavors of collectivism. he main difference is in the amount of coercion the apply to the people forced to abide by them. To a person who values their own liberty, all are equally abhorrent.

  1. Lastcall says:

    It occurs to me that elections are for adults what xmas is for children. We try and pick the Santa who promises us the most without thinking too hard about the realities. AOC seems to embody this best.
    Maybe we need to shorten the election cycle so we can have that ‘buzz’ once a year like we did when were just out of nappies?

    • Dan says:

      Yep

      https://www.magnumphotos.com/newsroom/politics/donald-trump-president-elect/

      (CNN)President Donald Trump on Wednesday announced that he is recognizing Venezuelan opposition leader Juan Guaido as the legitimate president of Venezuela.
      “In its role as the only legitimate branch of government duly elected by the Venezuelan people, the National Assembly invoked the country’s constitution to declare Nicolas Maduro illegitimate, and the office of the presidency therefore vacant. The people of Venezuela have courageously spoken out against Maduro and his regime and demanded freedom and the rule of law,” Trump said in a statement recognizing Guaido as interim president of Venezuela.
      Trump also urged other governments to recognize Guaido, adding that he “will continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy.”
      Trump continued by saying his administration will “continue to hold the illegitimate Maduro regime directly responsible for any threats it may pose to the safety of the Venezuelan people.”

      That’s right Trump’s boy didn’t even run much less was on anyone’s radar.

      https://venezuelanalysis.com/analysis/14305

      Don’t even get me going about the whole Brexit deal. I believe May is going to have a nervous breakdown on live television before it’s over.

  2. Uncle Bill says:

    Shape….doing just dandy….sarcasm
    Chesapeake Energy’s stock heads for 7th-straight loss, longest such streak in over 4 years
    Shares of Chesapeake Energy Corp. tumbled 6.1% in afternoon trade Friday, enough to pace the S&P 400 Mid Cap index in losses, and putting them on track for a seventh-straight loss. That would be the longest losing streak for the oil and gas exploration and production company’s stock since the 11-session losing stretch that ended on Oct. 14, 2014. Since that losing streak, there had been seven 6-day losing streaks. The stock has lost 20% during its current losing streak, but was still up 34% since it closed at a near 3-year low of $1.73 on Dec. 24. The stock’s decline on Friday comes despite a 0.1% gain in crude oil futures . Chesapeake has not issued a press release or filed anything with the Securities and Exchange Commission since Feb. 1. The stock has tumbled 34% over the past three months, while crude futures have shed 14%, the S&P 400 has slipped 2.9% and the S&P 500 has lost 3.9%
    https://finance.yahoo.com/m/ffc99edf-3a57-3627-8d9f-db7046d53843/chesapeake-energy%27s-stock.html

    • I think of Chesapeake as a natural gas company. Henry Hub spot prices dropped from $3.58 on January 17 to $2.57 on February 4, according to EIA. https://www.eia.gov/dnav/ng/hist/rngwhhdd.htm

      We have basically gotten through a mild winter, without much of a run up in prices. Natural gas producers need higher prices than this to stay in business.

      • The oil equivalent of these prices can be obtained by multiplying by 6. $2.57 per Mcf is equivalent to $15.42 per barrel of oil. Not a good price for natural gas producers.

      • Uncle Bill says:

        Thank you, Gail does that mean they stopped flaring?
        Chesapeake Energy, Fracking Pioneer, Bet on Oil. Then Prices Plunged
        For Chesapeake, a move to oil looks ill-timed, straining already frayed finances
        By Rebecca Elliott
        https://www.wsj.com/articles/chesapeake-energy-fracking-pioneer-bet-on-oil-then-prices-plunged-11546358400
        DOUGLAS, Wyo.—Chesapeake Energy Corp., best known for its trailblazing pursuit of natural gas from shale formations, is making a big bet on the oil below the rolling grasslands of eastern Wyoming.

        Its timing doesn’t look great. U.S. oil prices have fallen more than 40% since early October to close at $45.41 a barrel on Monday, straining the finances of the debt-laden company co-founded by Aubrey McClendon, the late wildcatter. It is a rough time to be planning new shale wells anywhere, but especially in Wyoming’s Powder River…

        January 1, 2019

  3. Rodster says:

    “It occurs to me that elections are for adults”

    Actually, elections today are more like Reality TV and a Game Show. It’s basically entertainment for the TV networks.

    • MG says:

      In my opinon, the elections are about the topics that are of the interest of the population. Not the solutions, as no one has solutions. The winner is the party or the person, who sees what are the most important topics for the population. That is why we no longer have like the right or the left parties, the Republicans or the Democrats. The parties can have various strange names, like we see it in Italy, and they are carriers and representants of the hot topics. When the interest in a given topic dies, the given political party is usually doomed to death.

      • Rodster says:

        For me swap out the word Talent for Politics “America’s Got Talent”. It’s become a Game Show.

      • The Italian case is a relevant one. But you have to take into account it took decades, and decades, decades more for the Italian voter to decisively commit to alternative (fringe) parties after all.

        The traditional systemic propaganda pealed off finally when people realized, yes the corruption of perennial political parties system is not only cliche talking point, hell it impoverished me markedly and I can’t take it anymore! And exactly the same occurred on related topics, open border policy – influx of migrants, etc..

        The fun and tragic point about these deeper political realignments is that they come often way past the threshold of implementation of different corrective path forward.
        In other words the changes applied will have its cost to the detriment of the public.
        It’s like field surgeon deciding should I keep the badly injured patient two legged or one handed instead..

        • TIm Groves says:

          I agree with you. For the voters it’s a dilemma. There’s a cost involved in continuing to go with the same political agenda that has been delivering poorly in recent years, and a cost involved in making changes, and there’s no guarantee that the changes will be beneficial. But perhaps the people have reached the point where any change seems preferable to the status quo.

  4. Davidin100millionbilliontrillionzillionyears says:

    what does it all mean?

    Japan 10 year yield has gone even lower… now -0.035% (that’s a negative sign there…)

    German 10 year Bund is down to 0.088%… still positive! but that’s only about one tenth of one percent…

    it almost seems that these are signs that something is seriously wrong…

    or is everything just fine and dandy?

  5. Chrome Mags says:

    https://www.newsweek.com/video-alexandria-ocasio-cortez-plays-scathing-corruption-game-its-already-1323479

    Ocasio-Cortez of as we know has that new proposal to transition the country to zero carbon emissions in 10 years, which is a flop out the gate, but check out the corruption lightening round she had with the ethics committee today. She cleverly pointed out how easy it is to be corrupt in DC. Here are some excerpts from that question and answer meeting:

    “Let’s play a lightning round game,” Ocasio-Cortez began. “I’m gonna be the bad guy and I want to get away with as much bad things as possible, ideally to enrich myself and advance my interests, even if that means putting my interests ahead of the American people.”
    “So,” the 29-year-old asked the panel, “if I want to run a campaign that is entirely funded by corporate political action committees [PACs], is there anything that legally prevents me from doing that?”
    “No,” one expert, Karen Hobert Flynn, the president of the government accountability watchdog group Common Cause, said decisively.
    “So, let’s say I have some skeletons in my closet and I need to cover it up so that I can get elected,” Ocasio-Cortez continued. The New York representative did not hide the fact that she had some very specific “skeletons” in mind, immediately turning to an article written by one of the panelists on hush money payments made shortly before the 2016 election to women who alleged they had sexual affairs with President Donald Trump.
    Addressing panel member Bradley Smith, a former chairman of the Federal Election Commission, Ocasio-Cortez asked: “Is it true that you wrote this article, this opinion piece for The Washington Post titled, ‘These payments to women were unseemly. That doesn’t mean they were illegal.'”
    After Smith acknowledged that he did write a story with that headline, Ocasio-Cortez summed up: “So, greenlight for hush money, I can do all sorts of terrible things. It’s totally legal right now for me to pay people off.
    “So, I use my special interest dark money-funded campaign to pay off votes that I need to pay off and get elected,” she continued. “So, now I’m elected, now I’m in, I’ve got the power to draft lobby and shape the laws that govern the United States of America.”
    “Are there any limits on the laws that I can write or influence?” Ocasio-Cortez asked the expert panel.
    “There’s no limit,” Hobert Flynn acknowledged.
    “So there’s none. So, I can be totally funded by oil and gas, I can be totally funded by Big Pharma, come in, write Big Pharma laws and there’s no limits to that whatsoever.”
    “That’s right,” the ethics expert said.
    “So, I could do that? I could do that now with the way our current laws are set up?” Ocasio-Cortez asked, seeking clarification. “Yes,” Mehrbani said.
    “OK, great,” she said. “Is it possible that any elements of this story apply to our current government and our current public servants right now?”
    “Yes,” at least two panelists confirmed.
    “So,” Ocasio-Cortez summarized, “we have a system that is fundamentally broken. We have these influences existing in this body, which means that these influences are here, in this committee, shaping the questions that are being asked of you all right now. Would you say that that’s correct?”
    Yes,” Walter Michael Shaub Jr., an American attorney specializing in government ethics who previously served as the director of the U.S. Office of Government Ethics, responded. “In terms of laws that apply to the president, yeah, there’s almost no laws at all that apply to the president.”
    “So, I’m being held, and every person in this body is being held, to a higher ethical standard than the president of the United States,” Ocasio-Cortez said.
    Ocasio-Cortez’s “Corruption Game” did not end there, however.
    “I want to do is get rich with as little work possible. That’s really what I’m trying to do as the bad guy, right?” she continued. “So, is there anything preventing me from holding stocks, say, in an oil or gas company and then writing laws to deregulate that industry and cause, you know that could potentially cause, the stock value to soar and accrue a lot of money in that time.”
    “You could do that,” a visibly bemused Rudy Mehrbani, who serves as senior counsel at the Brennan Center for Justice at the New York University School of Law, replied.
    “So, I could do that? I could do that now with the way our current laws are set up?” Ocasio-Cortez asked, seeking clarification. “Yes,” Mehrbani said.
    “That’s right,” Shaub confirmed once again. “Because there are some committee, ethics committee rules that apply to you.”
    “And it’s already super legal, as we’ve seen, for me to be a pretty bad guy. So, it’s even easier for the president of the United States to be one, I would assume,” Ocasio-Cortez said.
    “That’s right,” Shaub said.

    There is it a perfect explanation through this Q&A why DC is so corrupt, because as we know if people can be corrupt, they are.

    • Imagine what the situation is like in China, where there is a tradition of taking bribes for every type of favor. And cheating if you can get away with it. Quite a few in the US come from a Judeo-Christian set of beliefs about what is right and what is wrong. This doesn’t necessarily hold for the rest of the world.

      China is very protective of what its people see of the outside world. In some ways, it is more conservative than the US. What is accepted by the culture has a lot to do with what actions politicians and other leaders take.

      • Duncan Idaho says:

        Quite a few in the US come from a Judeo-Christian set of beliefs about what is right and what is wrong. This doesn’t necessarily hold for the rest of the world.

        Lol!
        Good for some laughs
        Thanks Gail

        • Perhaps a different view of what is expected.

          • Duncan Idaho says:

            True, in a very different way.
            “To live outside the law, you must be honest.”

            — Bob Dylan

          • Duncan Idaho says:

            “U.S. politicians are making the same mistakes with regards to Venezuela as they made with the regime change wars on Iraq and Syria. They believes that all people are as corrupt and nihilistic as they are. They believe that others will not fight for their own believes and their own style of life. They will again be proven wrong.”

      • jupiviv says:

        I don’t think taking bribes and cheating are considered virtues in Buddhism and Taoism. The ten commandments can fit into any major religion, really.

        • China has done its best to reduce the practice of any type of religion. Consuming more, and getting a better lifestyle, has become all important. (Not very different from the US! Who needs a god, when the politicians can solve all problems?) Also, the government is interested in providing jobs for everyone. This is a major reason for the many State Owned Enterprises.

        • TIm Groves says:

          I was in Osaka the other day. The streets were filled with thousands and thousands Chinese tourists over for the New Year holiday break. The shops were doing a very brisk trade, not just in things like brand fashion goods but also home electronics/electrical products and pharmaceuticals.

          It seems that many Chinese people don’t trust the boutiques, electrical stores or drug stores in China because they believe many of the products sold there are defective or fake. Whereas in Japan, even Chinese shoppers tend to trust Japanese drug stores not to sell pain killers or cough medicines that are fake or of poor quality.

          The issue is one of corruption, but it goes what we’d recognize as ordinary corruption. In societies where the vast majority of people are honest, fraud is limited to the extent that people tend to trust each other not to systematically cheat each other over small fundamental matters. You buy a box of Asprin, for example, you get a box of Asprin.

          But once you have a society in which some people will go to the trouble to produce fake boxes Asprin and sell them into the distribution system where others can pass them off as legit because this is cheaper than buying genuine products from the manufacturers of real Asprin, and the public finds out about this deception, then trust in everything breaks down.

          Fake goods do go on sale in Japan and elsewhere too, of course, but IMHO not to anything like the extent this sort of thing goes on in China.

      • milan says:

        study the Chinese upcoming Social Credit system and you have the beginnings of what the bible describes as the beast system where moral behavior is legislated by way of high tech! Judeo- Christianity was always about the self government of the individual person and love but where the Chinese model is taking us is enslavement pure and simple. Technology in the hands of a dystopian government spells the end and here I thought this was to be a Jewish creation and the Chinese apparently are taking the world their first? wow

    • In the area of corruption, the Center for Disease Control seems to have its own problems.

      The Atlanta Journal Constitution recently published an article about how Coca Cola had influenced the Center of Disease Control over the years, to skew its finding on what foods were appropriate for Americans in favor of findings that would be helpful to Coca Cola. For example, lack of exercise and too much fat were the cause of American’s problems. Both of these organizations are located in Atlanta.

      Coke and CDC, Atlanta icons, share cozy relationship, emails show (Feb 6.)

      https://www.salon.com/2019/02/01/new-emails-reveal-how-cdc-employees-were-doing-the-bidding-of-coca-cola/

      https://usrtk.org/academic-work/coca-cola-and-the-cdc-resources-page/

      This kind of situation is not really protecting the American public. I can imagine that meat producers and fast food folks have an influence as well.

  6. richard b says:

    We are on a collision course with arithmetic, and arithmetic is going to be the Winner.

    Try a thought experiment. A farmer has a farm of 10 square miles, but it’s just him and his wife. So they have 10 kids because they need farm labour. The next generation now works 1 square mile. But those 10 have 10 children each, and now everyone works a tenth of a square mile. Do this again, and everyone now has a postage stamp.

    At what point ( because tractors and farm machinery has been invented in the meantime) do you get family members for whom there is no job on the farm?

    Well, the farm is the world, and the children are the 8bn of us living on it. We just don’t need all the labour we have around us, and we can’t put it to work.

    Meantime another 90m people a year are arriving on earth. All of them young, and most of them will never see a job in their entire lives. What’s worse is that these unemployed are now demanding free education, breadwinner wages, and free medical care. Where could all this possibly come from?

    So the world belongs to the lucky few. Hence the inequality and no way of fixing it.

    • That is sort if what happens.

    • MG says:

      The problem is also qualitative, not only quantitative: those who say that the planet can feed more and more people disrespect the depletion of the soil and the rising amount of energy that is needed for returning the depleted minerals to the soil: we have to mine less and less economic mineral resources, too.

      The connection of mining and agriculture today is very close. On one hand, we can get more food from smaller area, but only if we invest more into mining, processing and transportation of the minerals and other nutrients to the soil.

      The current agriculture is much more energy intensive than many people realize. That way importing food from warm and humid areas to cold and dry ones becomes more and more economical than food production in the cold and dry areas. That way the tropical fruits and chickens from e.g. Brazil become more and more affordable in you Northern Hemisphere food stores.

  7. Duncan Idaho says:

    National Assembly

    Constitutional Assembly

    Can anyone see the difference?

  8. Baby Doomer says:

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